New York broker pleads guilty in $20M stock fraud scheme

NEW HAVEN, Conn. (AP) — A New York stock broker has admitted to his role in a $20 million stock fraud scheme based in Connecticut that swindled thousands of victims across the country.

The Hartford Courant reports (http://cour.at/2upGCop ) that Brian Ferraioli, of Sayville, New York, pleaded guilty Wednesday to fraud and tax charges. He’s the sixth person to plead guilty in the case.

Federal prosecutors say conspirators acquired blocks of stock in worthless shell companies and then pitched the companies as potentially successful to investors. Prosecutors say they used rigged stock trades and other tricks to inflate share prices of the stock.

Prosecutors say the scheme affected more than 12,000 victims, many of whom lost life savings.

Former Hartford city councilor Corey Brinson was sentenced to three years in prison in April after pleading guilty in the case.